If you’re in the market for a new credit card, you know there are plenty of different rewards out there that lenders use to entice new clients. After looking at enough lists of potential rewards, you might find yourself asking: what is cash back credit card? This is an excellent question that you’ll probably be very happy to hear the answer to.
What Is Cash Back Credit Card?
Cash back, in credit card terms, is a type of reward program which allows card holders to earn completely unrestricted currency each time they use their card in a particular way. Every time you make a given purchase (see below for details), these cards send a small percentage of the money you spent right back to you in standard Canadian dollars.
Unlike the more common gift card or points rewards, cash back rewards put total control of the full monetary value of the gift in the hands of the user: you. This makes cards with this reward option highly desirable in the overall credit card marketplace. Lenders who offer this perk can sometimes afford to be very exclusive in who they approve for a line of credit. If you manage to get your hands on one, you’ll understand why – using them almost feels too good to be true. In general, you’ll have an easier time getting one (and be offered higher cash back rates) with a healthy credit score, but this is by no means a universal rule.
Choosing and Using Your Cash Back Card
One of the key things to be aware of when seeking a cash back card is that some cards deal with their reward system. Some cards reward any user spending regardless of what the money was used for, but many limit it to certain spending categories in order to keep the program financially viable. If a card does carry category restrictions on its cash back terms, they will be clearly outlined for you during the application process in order to allow you to make the best possible decision for yourself. The most common of these include groceries and gas, two areas where most people spend a significant amount of money anyway, so even earnings-restricted cards can get you a sizable chunk of extra money.
You should be careful not to get carried away and overspend trying to rack up more reward money, though; cash back cards will allow you to generate some extra side revenue just by living as you always have.
Extra Cash, Just For You
Because most people don’t account for money accrued in this way in their monthly budgets, this source of income can safely be used for discretionary purposes; in other words, it’s ‘fun money.’ You can use it to build up an emergency savings fund, or stash it away for the holiday season. You can use it for small splurges like a trip to the movies, a spa day, or a delicious restaurant dinner, all completely guilt-free. You could even use it to buy back some free time for yourself by hiring a service to tackle some household chores for you. Whatever you choose to do with it, you can rest assured that the extra money will help make your life more enjoyable. How often do you get money you can use so freely?
Get Your Cash Back Card Now
Ready to try one of these cards out yourself? You can do it with the help of Bonsai Finance. Our lineup of lenders is sure to have a cash back card option that will suit you perfectly, and because we operate entirely online, you can evaluate each.